Report: California legal pot could “cripple” B.C., Canada economies

By Bill Mann

Could the passage of California’s referendum in November legalizing marijuana cultivation “cripple” the Canadian and British Columbia economies, a report in the Vancouver Sun asks?

And could widespread pot legalization in the U.S. really be “devastating to the Canadian economy,” a Guardian piece quoted in the Vancouver daily asks — or are alarmists just “blowing smoke,” the Sun piece by Douglas Quan wonders. The Sun story cites as its source the story in The Guardian headlined, “Marijuana may cause Canada’s economic comedown.”

About 70 percent of the marijuana grown in the western Canadian province is sent to the U.S., much of it to California, says criminology professor Darryl Plecas of B.C.’s Abbotsford University.

Introducing The Meters

And, to make matter even worse for B.C. pot growers, B.C. Hydro, the province’s big utility, is installing “smart meters” on its customers’ houses and businesses, and hopes to have them replace all its analogue units by 2012, says another Sun story.

The new meters, the story says, will nip many grow houses “in the bud” by cutting electricity theft, which was estimated in 2006 to cost Hydro $30 million per year. Some utility experts have said that residential-based grow operators have either tampered with their existing meters or rewired nearby distribution power lines in order to mask the large volume of power they need to run the lights that serve their indoor nurseries.

Pro-marijuana advocates say clamping down on grow houses will affect mom-and-pop operations and allow bigger, more sophisticated growing operations with generators and LED-lighting technology to flourish.

A B.C.-based company, Corix Utilities, is interested in providing B.C. Hydro with the meters. Corix currently supplies many of the smart meters currently being installed by U.S. local electric companies.

It’s Big Business

Marijuana production generates at least $3 billion industry in British Columbia, the Sun story says, adding that there’s a large demand for potent “B.C. bud” in the U.S. Placas says “Producers are probably looking frantically where they can ship it besides California” if the referendum legalizing home growing in California passes.

A Sun series in 2004 estimated the number of growing facilities in B.C. at between 2,000 to 20,000, and Forbes estimated back then the value of the marijuana at $7 billion — between 1.5 and 6 percent of the entire GDP of the province at that time.

Canadian anti-pot laws and enforcement are not as strict — some would say not as “draconian” — as they are in the U.S.

“Increased availability for a lesser price in the U.S. will have an effect on Canadian suppliers,” adds University of Ottawa criminology professor Eugene Oscapella, who believes legal pot in the huge California market will drive some B.C. producers out of the business.